Toll-free Calls To Cut Revenues

Bell Atlantic May Lose $17 Million

October 05, 1994|By PAM RUNQUIST Daily Press

With Bell Atlantic's expansion last Saturday of toll-free calling in Hampton Roads, the company expects to lose revenue from both regular and special long-distance calling services no longer needed by area customers.

Other long-distance telephone companies that sell 800-numbers in the area also anticipate slight losses from less frequent use of such numbers on both sides of the water.

Bell Atlantic is the only company authorized to provide regular long-distance services within the Hampton Roads calling region, said Ken Schrad, a spokesman for the State Corporation Commission that regulates the industry.

Schrad said local telephone companies, such as Bell Atlantic, were given monopolies within Virginia's regional calling zones following the breakup of the Bell System 10 years ago.

However, Schrad said, other long-distance telephone companies - such as AT&T Corp. and Newport News-based Eastern Telecom Corp. - are allowed to sell 800-numbers to Hampton Roads customers, who then use them within the area and elsewhere.

Bell Atlantic officials have estimated that expansion of toll-free calling within several of its Virginia calling regions, including Hampton Roads, will reduce revenue by about $17 million per year.

That's despite increases in monthly service fees for some customers. For example, some of the company's 500,000 Hampton Roads area customers will experience increases ranging from 95 cents to $1.69 per month.

Along with fewer regular long-distance calls, fewer customers now will need special long-distance services provided by the company within the region, said Jim Griffith, Bell Atlantic's Peninsula manager.

For example, Griffith said some Hampton Roads business customers called Monday to cancel their foreign exchange, or FX, lines.

Such lines allow a customer in one telephone exchange to have a local line in another exchange. Before the expansion of toll-free calling, that meant a Newport News company could offer a local phone line for customers in Norfolk.

Griffith said other long-distance services where the company expects an impact include remote call-forwarding; wide area telephone service, or WATS lines; and 800-numbers.

"We're getting a significant number of calls from businesses who want to change some of their services," Griffith said, although he declined to specify how many customers had called.

Donna Lewis, vice president of sales and marketing for Eastern Telecom, said Monday that company hadn't had any cancellations of the 800-numbers sold to some of its 2,000 Hampton Roads customers and didn't expect any.

Lewis said most customers buy 800-numbers to serve a much larger area than Hampton Roads, so they wouldn't cancel them just because toll-free calling was expanded in this region.

However, Lewis said the company does expect a decline in fees paid for usage of 800-numbers because more people can now use toll-free local lines.

Doug Sammak, district sales manager for Cable & Wireless Inc., said the same situation is expected at that company, which also has about 2,000 customers in the area. "We are expecting to see a decrease in revenue, but not expecting to see accounts canceled," Sammak said.

Both Lewis and Sammak said their companies had not yet made specific estimates of lost revenue.

AT&T spokesman Monty Hoyt said he didn't know how many 800-numbers the company has in Hampton Roads or whether any have been canceled. But he said AT&T's experience with 800-numbers has shown that expansion of toll-free calling within a region has only a slight impact on their usage.

"Most businesses that decide to have an 800-number are usually reaching out to customers outside the local areas," he said. Hoyt said AT&T sells and services more than 50 percent of the 3.5 million 800-numbers in use in the United States.